TCS Daily

Getting Framed

My 97-year-old Aunt Sis is not five feet tall. She plays golf on a 54
par executive course in front of her apartment building. Twelve months
a year. In the winter when it snows she uses orange balls. Tee off is
at 7 a.m. Don't be late. She carries a putter, a sand wedge and a 5
iron. If a foursome or even a twosome does not know how to efficiently
get on and off a green, she simply veers and skips that hole. She hits
every ball 125 yards out and straight.

Her mind is as clear, short and to the point as her golf game.
"Watch the little things," she warns. "That is the test of character.
The big things follow the little things."

Recently a little thing popped up that gives one a glimpse into the
corporate ethos of SBC, the second largest regional Bell operating
company. It didn't pass Aunt Sis' test.

First, some background.

In a browser window you move from page to page by clicking on links
that are usually along either side or the top or bottom of the window.
In the early days when you hit these links the whole page would
repaint. Then web page creation software came out with easy commands
that let you repaint just part of the page (they called these lesser
areas frames). In this way you can navigate from page to page but have
the "table of contents" of page choices stay stationery. Millions of
sites in the world work like this.

Now for the little thing that popped up.

In January one of those millions of sites, a small online retailer
of toys and educational materials, MuseumTour.com, received a letter
from SBC lawyers that had nothing to do with their phone service. The
SBC lawyers stated that they had reviewed MuseumTour's site and found
that it had violated their patent. What patent? SBC claims to own the
concept of frames.

According to MuseumTour.com: "The letter suggests that any website
which has static, linked information (top banners, menus, bottom
banners) which are displayed while other sections of the page are
displayed as non-static (the area where products appear on most
websites) infringes upon the patents they hold."

Apparently SBC feels that if people who own websites care to paint
a whole page it is OK with them, but if they want to paint just part of
a page they have to pay.

The letter did not threaten MuseumTour.com with legal action.
Instead it offered them royalty terms based on their revenue. SBC
offered them a "Preferred Rate" (10% discount to the standard rate).
These annual rates ranged from just over $500 to over $1.5 million,
depending on revenue.

Curious, I contacted well-known Boston patent attorney Bruce Sunstein, of Bromberg and Sunstein. Bruce was recently named one of the five best intellectual property lawyers in Boston by Boston Magazine
(Oct. 2002) and the only one cited for patent prosecution skills. He is
also patent counsel for Dean Kamen, inventor of the Segway™ human
transporter. His practice involves technologies, including
bioinformatics, electronic circuits and systems, computer hardware and
software, communications and speech, biomedical devices,
bio-pharmaceuticals, and mechanical devices. He is also the older
brother of Laura, with whom I went to high school. Here is his
response:

Dear Bob:

The effort of SBC in getting money by licensing its patents to the
use of frames in a web browser follows a path somewhat similar to that
taken by attorneys in licensing the patents of Jerome Lemelson, a
prolific patent holder who, late in life, made millions by licensing
and sometimes litigating his patents. The actual letter of SBC to one
of its targets is reproduced at http://www2.museumtour.com/sbc.html.

One of the tricks is to make the royalties so low that in most
cases it is cheaper to pay than to litigate. Another trick sometimes
employed is to first go after only relatively small companies that are
not likely to challenge the patent in question. Yet another trick is
not to threaten suit, but rather to offer a license. If you merely
offer a license, you have not threatened your target with infringement,
so the target cannot initiate litigation against you for patent
invalidity.

In examining patent applications the Patent and Trademark Office
(PTO) has the job of determining whether the invention qualifies as new
and non-obvious. Because there is no such thing as a list of new
inventions that the PTO can refer to, the PTO can tell if an invention
is new only by looking at things that are old and comparing them with
the subject of the patent application. Of course, there are a nearly
infinite number of things that are old, and it is essentially
impossible to consider everything that counts as old. Thus although the
PTO does a search of things old (the prior art), and the applicant is
also required to disclose all prior art known to the applicant that is
close, one cannot be assured that all prior art is always uncovered or
considered. So any patent that has been issued can be invalidated if
close enough prior art is later uncovered.

Actually, it is possible for a patent to be invalidated without
litigation. For the sum of $2,520, one can request re-examination of a
patent based on prior art that should have been considered but was not.
(If you want a say in the re-examination process, however, the fee goes
up to $8,800.) There are a number of important instances in fact in
which the Patent and Trademark Office (PTO) instituted re-examination
of a patent on its own, when important prior art was not considered.
One example is the Compton's New Media patent 5,241,671, for
information search technology widely used on CD ROMs, which was
invalidated by the PTO on re-examination.

While I have not studied them in detail, nor looked at their
procedural histories - things that need to be done to evaluate the
patents in a thorough and formal manner - the particular patents being
offered by SBC (here and here)
are not in my view likely to survive re-examination by the PTO because
there is a considerable amount of close prior art that does not appear
to have been considered.

Because SBC seems to have been smart enough not to have initiated
litigation, my bet is that it will eventually say good night to this
particular project without too much embarrassment. While other
commentators suggest that episodes like this are evidence that the
patent system is broken beyond repair, in my view, the fact that
apparent errors of this sort can often be corrected for relatively
short dollars suggests that the system mostly works fairly well.

Regards,

Bruce

So there you have it, MuseumTour.com, from no less than Bruce
Sunstein. Don't sweat it. Apparently the Patent Office, unlike the FCC,
corrects its mistakes and is unlikely to let this stand.

Take note, SBC. I have applied to the Patent Office for a patent on
not punching oneself in the nose. From now on everyone who does not
punch himself in the nose is going to have to pay and pay plenty. And
you are first, SBC.